Brazil’s stock market plunges after corruption claims

BRASÍLIA: Brazil’s Bovespa stock market was briefly halted as investors reacted to corruption allegations against Brazilian President Michel Temer. Stocks plunged more than 10% at the start of trading, prompting circuit breakers to kick in and halt dealings. President Temer was forced to deny a newspaper report that he had given consent to paying off a witness in a huge corruption scandal.

The Supreme Court has authorised an investigation into the allegations. On Thursday Mr Temer said in a TV statement: “I never authorised any payments for someone to be silent. I did not buy anyone’s silence. I fear no accusations.” “I have nothing to hide. I never authorised anyone to use my name” “We cannot throw so much hard work [on reforms] done for our country in the rubbish bin.” “I will not resign. I will not resign. I know what I have done.”

Investors are concerned that Mr Temer’s reform plans could be derailed. The Ibovespa index closed more than 8.8% down at 61,575 points. Mr Temer is trying to get pension reforms through Congress that would mean men would have a minimum retirement age of 65, and women 62, and most people would contribute more. There is currently no minimum retirement age. There are also labour reforms on the cards to weaken trade union bargaining powers and make hiring and firing workers easier.